NEW ORLEANS — An arbitrator has sided with the New Orleans Saints in ruling that Jimmy Graham can only be considered a tight end for the purposes of his franchise tag designation.

The ruling Wednesday by Stephen Burbank is setback for Graham, agent Jimmy Sexton and the NFL Players Association, who’d filed a grievance arguing that Graham was used as a wide receiver often enough to qualify for the more lucrative receiver tag. Graham’s case is being closely watched around the league because it could set a precedent for negotiations involving players who fill diverse roles in their teams offensive or defensive schemes. For example, some outside linebackers in a 3-4 defensive scheme, who could argue their right to receive the higher defensive end tag.

NFL franchise tags, which allow teams to keep one prized free agent, was set this year $7 million for tight ends and $12.3 million for receivers.

The NFLPA says it is reviewing the ruling and will advise Graham on his options, which could include an appeal.

Graham has skipped Saints offseason practices while holding out for a new, long-term contract. A favorable ruling would have further enhanced negotiating leverage for Graham, who last season led the Saints with 86 catches for 1,215 yards and 16 touchdowns.

Such disputes are not frequent, but draw lots of attention because they hold the potential to set a precedent.

Baltimore’s Terrell Suggs, the 2011 Defensive Player of the Year, argued in 2008 that he should be tagged as an end, not a linebacker. The difference back then was about $800,000. That dispute ended when Suggs signed a new deal long-term contract with the Ravens. He later helped them win the 2012 NFL championship.

July 15 is the final day a team can sign 2014 franchise players to long-term extensions. Otherwise, they must play under their franchise tag designation for one season, after which they would be set to become free agents again. At that time, their respective teams could apply the franchise tag to them again as well.